Self-Employed Mortgage First Time Buyer

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Self-Employed Mortgage First Time Buyer

Self-Employed Mortgage First Time Buyer

Paul Collinson explains how the mortgage process works if you are self-employed and a First Time Buyer.

How does getting a mortgage as a self-employed First Time Buyer work? Is it difficult?

It’s the same process as if you were an employed home mover, and I’ll explain that process shortly. The only thing that differs are the income documents required and how lenders assess the income. 

If you’re employed it’s based on your salary and any overtime or bonuses. But for the self-employed there are lenders that use salary plus dividends, and some will use salary and a share of business profit. 

It’s not difficult to get a mortgage when you’re self-employed or a First Time Buyer at all, because there’s a wide variety of lenders to use. We’ll find the most suitable ones for your specific situation.

How many years do you have to be self-employed to get a mortgage as a First Time Buyer? 

Most lenders need to see two years of trading. I do have an option available that would only need one year, but two years of trading accounts or self-assessment documentation is the norm.

How much can I borrow for a mortgage if I’m a self-employed First Time Buyer?

It’s all done on income multiples. We’ll look at various things such as your income, whether you have any children, other dependents and commitments such as loans or credit cards.

Everyone’s circumstances and criteria are different. So we’d need to look at the whole picture to confirm how much you could borrow.

How is a mortgage calculated for a self-employed First Time Buyer in the UK?

We may be able to get them up to 5.5 times their income. This is dependent on your deposit and whether you have any children or commitments. We will need to look at the whole picture.

What documents do I need to prove my income as a self-employed First Time Buyer? 

If you’ve been self-employed for two years or more, we’ll need two years’ SA302s and tax year overviews. Your accountant will be able to provide those for you. 

If you’ve just got one year’s details then we just need those. Then we need the latest three months’ personal and business bank statements, along with ID in the form of a driving licence or a passport.

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Buying a new home can be a stressful time for anyone. Our job here at Brick2Brick Mortgage Solutions is to make the process a lot easier, taking the stress out and making the clients journey smooth and so much more.

What if I have bad credit as someone who is self-employed and looking at my first mortgage?

It depends on what sort of bad credit you have. Is it one or several missed or late payments on a credit card? Is it a default or County Court Judgement? 

You would need to come to us so we could assess the full credit file, which you would obtain on our website. We look at the whole scenario there and ascertain where we could possibly go for you.

How do lenders calculate my income as a self-employed First Time Buyer?

The mortgage is calculated based on up to 5.5 times your income, depending on the lender, your income, deposit and any commitments.

How can I improve my chances of getting a mortgage as someone who is self-employed and a First Time Buyer?

You need a minimum one year of trading, and to have kept up to date with your payments on any credit cards or loans etc. If you can, avoid taking any extra credit out because it will impact the maximum borrowing potential that we could get for you. 

A lot of people want to borrow the maximum they can. But if they keep getting loans, hire purchase or credit cards out, these will act as a commitment and go against what you could borrow.

How do I apply for a mortgage as someone who is self-employed and a First Time Buyer?

Come to us, and we will ascertain your maximum potential borrowing amount. Then you’ll know what property values to look at and what deposit you’ll need to get together. We could then supply you with an Approval in Principle.

When you go to an estate agent to look for a property, that Approval gives you credibility. It means that once you find somewhere you’re ready to put an offer in. When they accept the offer, we’ll be able to find the most suitable mortgage option for you. We get your documents together and apply on your behalf. 

We deal with over 90 mortgage lenders to make sure we get the most suitable deal available for you.


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